Market competition and abatement technology diffusion under environmental liability law

Yi Li

No 168573, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: One challenge in environmental liability law is to apportion the liability appropriately among multiple parties, when these multiple parties generate a single and non-separable damage. This paper provides a method of designing efficient apportionment rule in the presence of product market competition. In particular, I examine the role of apportionment rule in inducing abatement technology diffusion between competing firms. I show that such diffusion can be induced by an efficient apportionment rule. And this apportionment rule allocates a relatively large (more than 1/2) portion of the liability to the firm which originally owns the abatement technology. Furthermore, allocating the liability equally between the firms cannot induce diffusion.

Keywords: Environmental Economics and Policy; Industrial Organization (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com, nep-env and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:168573

DOI: 10.22004/ag.econ.168573

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